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Kelly Witherspoon
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512.226.8706 kelly.witherspoon@berkadia.com
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South Shore Apartments (the “Property”), a 300-unit, garden-style apartment community situated on Willow Creek Drive in Austin, Texas. Built in 1974, the Property encompasses 28 garden-style residential buildings efficiently situated on 9.94 acres for a moderate density of just over 30 units per acre. The Property’s centralized location within the East Riverside submarket provides seamless connectivity to many of Austin’s most notable employment and entertainment hubs through the use of Interstate 35 (I-35), State Highway 71 (SH 71) and U.S Route 183 (U.S 183), which combine to transport approximately 339,000+ drivers daily. Furthermore, given Austin’s massive investment in public transportation infrastructure, future residents of the Property stand to benefit immensely from the accessibility of transportation throughout the Austin MSA. Recently, Project Connect leaders announced that the construction of phase I of the light rail system would commence in 2027 with completion in 2033, amounting to a $7.1 billion capital investment into Austin’s transportation infrastructure.
Current ownership has capitalized on a programmatic interior renovation plan to help capture previously unachieved rental premiums at the Property. These improvements have significantly enhanced both the appearance and efficiency of South Shore and have laid the foundation for additional improvements to take the Property’s units to the next level. There are currently three different interior renovation packages with 54 units in “Standard” condition (bottom-tier), 237 units in “Signature” condition (middle-tier) and 9 units in “Platinum” condition (top-tier). Utilizing a strategic and targeted approach, potential investors can immediately expand on the value-add strategy by improving specific “Standard” and "Signature" floorplans to "Platinum" finished, capturing $150+ rental premium on almost 33% of the property.
South Shore provides an investor a rare opportunity to own an apartment community that is minutes from Austin's CBD and is perfectly positioned to reap the benefits of major economic drivers currently under construction and planned within Riverside and throughout the MSA.
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East Riverside Corridor Regulations Foreshadowing Immense Growth
East Riverside Corridor (ERC) Regulating Plans are set to drastically impact the submarket by permitting the construction of vertical mixed-use buildings while also promoting walkability and retail. ERC regulations reveal neighboring properties surrounding South Shore are zoned for mixed-use or neighborhood mixed-use, granting future developments the ability to build up to 60 feet in height. The East Riverside Corridor (ERC) is currently at the precipice of a massive revitalization. The ERC is a crucial gateway that connects downtown Austin to the southeastern region of Austin which houses the likes of Austin-Bergstrom International Airport, Oracle and Tesla, among others. The City has allocated considerable time and resources in producing a comprehensive master plan and vision for what the area will be transformed into over the next decade. The most recent plans call for a massive investment into transportation (bus, rail, and bike) with an emphasis on enabling transit supportive developments around primary transit stops, increasing the aesthetic appeal of buildings within the corridor, improving safety and comfortability for residents, providing ample amounts of green space and providing a wide variety of housing options for residents to choose from. With the massive investment from the City as well as privately held companies, the ERC and South Shore will stand to benefit greatly from the transformation that is currently underway.
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AUSTIN
2500 Bee Cave Road Building 3, Suite 550 Austin TX 78746
Producers:
Justin Cole
Managing Director
512.226.8706 justin.cole@berkadia.com
Adam Sumrall
Director
512.960.2674 adam.sumrall@berkadia.com
Justin Chambers
Director
512.969.6838 justin.chambers@berkadia.com
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Major Development Transforming East Riverside Corridor
The East Riverside submarket has become inundated with significant corporate expansions and relocations in recent years which has increased the economic impact & outlook of the area dramatically. Companies such as Oracle (5 Minutes), and Tesla (15 Minutes), who opened their $10 Billion Gigafactory west of Riverside in 2022, have greatly impacted the East Riverside corridor. Not to mention the proximity of Downtown Austin (5 Minutes), which is home to 15% of the City’s jobs. To accommodate this surge in corporate expansion, multiple large-scale developments are planned in and around East Riverside, which will certainly benefit South Shore for years to come. River Park, among other proposed developments, aims to reshape East Riverside with its $4 billion capital infusion into the area. Once the project is complete, it will house over 10 million square feet of office, retail, entertainment, and hotel space. Additional developments changing the Austin landscape for the better include the Longhorn Dam Wishbone Bridge, a $25 million investment in creating a three-pronged bridge and peninsula around the lake, the Riverside Place development, East Riverside.
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Project Connect Revolutionizing Austin Public Transportation
Project Connect is a new transit plan for Austin that is set to completely transform its public transportation infrastructure. By implementing a new light rail and services across the city, Austin residents will be seamlessly connected to the Austin-Bergstrom International Airport, Downtown, South Congress, University of Texas, and more. Construction of phase I of Project Connect will commence in 2027 with completion in 2033. Phase I is a $7.1 Billion stretch of light rail that will operate from 38th Street in North Austin, to “Yellow Jacket” station just before the Austin-Bergstrom International Airport. By running through East Riverside Drive, the light rail will be just a short walk from South Shore at the intersection of East Riverside Drive and Pleasant Valley Road. This will undoubtedly impact South Shore residents by providing fast, reliable transportation as well as connectivity to major employment and entertainment hubs.
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Well Maintained Community with Tremendous Upside & Value-Add Potential
South Shores’ current ownership has done a meticulous job of implementing a programmatic interior renovation strategy and has been able to prove a healthy renovation premium on their Standard and Signature interior design packages. In addition to the programmatic interior renovations that have taken place, ownership has also injected $2,727,849 into the Properties building exteriors, common areas, as well as amenity offering to help revitalize the Property for years to come.
To date, ownership has upgraded 237 units to their Signature package (middle-tier) and 9 units to their Platinum package (top-tier) for a total renovated unit count of 246 units. The Property still has 54 units in their Standard package (bottom-tier). These 54 Classic units, along with the additional 237 Standard units, give an investor an opportunity to capture potential premiums on 291 units if they were to upgrade all units to the Platinum renovation package.
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Continued Employment Expansion and Relocation
South Shore is engulfed by employment opportunities in all directions. Within 15 minutes of the Property, notable employers include Oracle, Tesla, Applied Materials, Meta, Google, Accenture, Ascension Texas, Deloitte, Whole Foods, among others. These companies collectively employ tens of thousands of high-earning jobs and have helped drive Austin to having the 5th highest average tech wage in the country ($157k), trailing slightly behind San Francisco ($174k), Seattle ($168k), New York ($158k) and Boston (158k). Furthermore, despite the 2022 headline signaling strong signs of layoffs, Austin saw an uptick in 2023 company expansion and relocation. In 2022, the Austin Chamber of Economic Development reported 13,271 jobs being either expanded from companies with flag poles already located in Central Texas, as well as new companies following the tidal wave of notable Fortune 500 companies planting deep roots in Austin. With the close out of 2023, company expansion and relocation totals were reported to be at 18,632 new jobs created which represents a 40% year-over-year growth in jobs created. This massive uptick in job creation from 2022-2023 highlights the strong demand for established as well as prospecting companies to continue investing in Austin.
Major Arterials Close by Provide Efficient Connectivity to Key Economic and Employment Hubs
South Shore’s premier location directly abutting East Riverside Drive allows residents seamless ingress and egress from the Property to major thoroughfares, such as Interstate 35 (I-35), State Highway 71 (SH 71) and U.S Route 183 (U.S 183) that provide quick and easy access to all of Austin MSA.
South Shore is inundated by some of Austin’s most important economic and entertainment drivers, and residents benefit from living within a 15-minute drive to many of them.
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Downtown Major Employers: Meta, Google, Whole Foods, Indeed, Accenture, Deloitte
Local Major Employers: Oracle Campus, Tesla Gigafactory, Austin-Bergstrom International Airport
Local Entertainment Hubs: The Boardwalk at Lady Bird Trail, Roy G. Guerro Colorado River Metro Park, Riverside Golf Course, Downtown Austin, South Congress, 6th Street Entertainment District
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